Cardano has officially proposed a $225 million funding plan to grow its ecosystem. This large budget aims to support key areas like protocol development, zero-knowledge (ZK) technology, and other strategic expansions.
The proposal was submitted on May 12, but itโs not approved yet. For this to happen, it needs to pass a community governance vote. This includes approval from delegated representatives (DReps) and members of Cardanoโs Intersect Civics Committee (ICC).
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Why This Proposal Matters
The Cardano Treasury holds funds to support long-term growth. Spending this $225M would fund new projects, upgrades, and innovations that can help Cardano stay competitive with other blockchains like Ethereum and Solana.
But not everyone agrees with how this money should be spent.
โ Community Divided: Supporters vs Critics
While some community members see this as a bold investment into Cardanoโs future, others worry it might hurt ADAโs value.
One of the biggest critics is a well-known Cardano whale. He voted against the proposal, raising two main concerns:
Risk of Wasteful Spending โ He believes some of the 39 initiatives included are not worth funding, calling some โriskyโ or even โscams.โ
Inflation Pressure โ More spending could increase ADAโs circulating supply, potentially lowering its value.
He warns that in a tough market like 2025, careless treasury spending could become Cardanoโs โbiggest risk.โ
โ The Other Side of the Argument
On the flip side, supporters of the proposal argue that:
The impact on ADA inflation will be small, especially if spending is done slowly and carefully.
Charles Hoskinson, Cardanoโs founder, supports taking bigger risks now to avoid falling behind in blockchain innovation.
Supporters also believe that without funding new technologies, Cardano might lose relevance against faster-moving competitors.
โ Voting Status & What Happens Next
Voting ends on June 14.
As of now, only 7% of DReps voted NO.
A large majority (92%) have not yet voted.
For the proposal to pass, more than 50% of DReps need to vote YES, plus get approval from the constitutional committee.
This means the final outcome is still uncertain.
โ How is ADA Price Reacting?
Interestingly, the ADA price has not been negatively affected by the governance debate.
In fact:
Market sentiment has turned positive.
ADA is trying to break above the $0.80 resistance level.
This level was a key peak in early 2024.
If ADA can turn $0.80 into support, it could target $0.90 or even $1 in the near future.
Technical indicators show ADAโs recovery is strong, and bulls are pushing to end the downtrend that started earlier this year.
โ Conclusion: Why Investors Should Watch This
The $225M proposal is more than just a spending plan โ itโs a test of Cardanoโs governance and community decision-making.
A YES vote could fund innovations and attract more users and developers.
A NO vote could signal community fears about treasury management and token value.
For investors, keeping an eye on the vote result and ADA price reaction will be key in the coming weeks.
